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IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors -…
IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
1. Changes in Accounting Policies
Reasons for change
Required by IFRS
To make financial statements more relevant and reliable
Accounting Treatment
Retrospectively (adjusted opening Retained Earnings)
Definition
Different bases, methods, rules or practices applied in preparing financial statements
2. Changes in Accounting Estimates
Reasons for change
Valid reason
Justifiable by evidence
Accounting Treatment
Proscpectively (adjust in the period of change
Definition
Adjustments to the carrying amount of assets or liabilities
3. Correction of Material Errors
Reasons for change
Mathematical error
Mistake in applying accounting policy
Fraud
Accounting Treatment
Adjust opening Retained Earnings
Definition
Omissions or misstatements in financial statements